DE BEERS GLOBAL SIGHTHOLDER SALES
THE GLOBAL SIGHTHOLDER SALES (GSS) VISIT – WHAT YOU WILL SEE TODAY A tour of the world’s leading rough diamond sorting and distribution facility, including visits to key diamond areas: • Canadian production sorting • ‘TechSort’ (sorting area using De Beers’ proprietary technology) • Large stones We will also provide you with a chance to see our leading synthetic detection equipment in action: • DiamondSure • DiamondView • Automated Melee Screening device (AMS) • PhosView 1 The De Beers Group of Companies
BACKGROUND TO GSS • After developing an international network of Diamond Trading Company (DTC) operations to support producer countries’ beneficiation objectives, GSS relocated to Gaborone in November 2013 as part of the current Botswana Sales Agreement • The relocation was delivered ahead of time, within budget and included the building of a new Sight floor • GSS recently celebrated its 30 th Sight in Gaborone • De Beers delivering increased industry professionalisation through: • Improved distribution efficiency • Introduction of De Beers’ Best Practice Principles (BPPs) to govern business ethics • Driving greater financial robustness and transparency through customer financial compliance requirements 2 The De Beers Group of Companies
THE ROLE OF GSS Gahcho ho Kué GSS CUSTOMER MER Victor or Role of GSS Any boxes purchased by GSS • ‘Aggregation’ (blending together customers (Sightholders and like-for-like categories): Accredited Buyers) are shipped out Debmarin arine e Namib ibia ia • Smooths out peaks and to the relevant centre before being Namib ibia ia DTC troughs in mining manufactured (cut and polished) Namdeb deb • Wider range of product • Enables product consistency Orapa • Creating ‘boxes’ of products – DTC Bot otswan ana these are designed to meet a Jwanen eng particular manufacturing approach or downstream market De Beers De Beers Sight htholder holder need Consolid olidat ated ed Mines Sales es South h Afric ica • Managing the global rough diamond assortment nt and pricing cing Sorted rough diamonds are sent to GSS after being sorted into +10,000 Price • Delivering additional paid-for Book Items (PBIs). servic ices es 3 The De Beers Group of Companies
BENEFITS OF AGGREGATION Volatil ilit ity in carat deliv liver ery y by prod oduc ucing ing countr ntry 100% • Smooths out peaks and troughs in mining 80% • More consistent offering 60% for more of the Namibia production Canada 40% South Africa • Wider range of product 20% Botswana Aggregated Mix 0% • Mitigates volatility -20% -40% Indicative 12 month period 4 The De Beers Group of Companies
INTEGRATED SALES OPTION GSS Aucti tion on Sales s (DBAS AS) INFORMATION (c90% of De Beers sales) (c10% of De Beers sales) FLOW • Term contract • No contract • Planned supply of Sight boxes • Rough diamonds sold via • Uniform price, set by De Beers online auction with limited or Sightholders may also bid in • Intellectual property benefits no future supply commitment the DBAS auctions (Sightholder signature) from De Beers • Variable price, set by market • Highly innovative business • Continuously innovating DBAS auction buyers can build up a track record of • Experimenting with pilot demand for De Beers rough projects 5 The De Beers Group of Companies
GSS CUSTOMERS OPERATE IN ALL STAGES OF THE DIAMOND VALUE CHAIN GSS rough gh sale les by clie ient nt locat atio ion n 2015, 5, by value ue 3% 4% Rough Cutting & Polished Jewellery Jewellery Primary ry Model el 3% Preparing Retail Sightholders* Dealing Manufacturing Wholesale Polishing Wholesale 4% Dealers 4% 6% 34% Dealers/Preparers 4% 5% Dealers/Cutting & 17% Polishing Dealers/Cutting & 6% Polishing/Jewellery 9% Manufacturing Cutting & Polishing 15% 12% Cutting & Polishing/Jewellery 37% Manufacturing 24% Cutting & Polishing/Jewellery 4% Manufacturing India Belgium Botswana /Retail South Africa Switzerland Israel Retailers 11% Namibia UAE US * % based on number of customers Other 6 The De Beers Group of Companies
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